Advanced Search
MyIDEAS: Login to save this article or follow this journal

Pricing Behavior and the Introduction of the Euro: Evidence from a Panel of Restaurants in Italy

Contents:

Author Info

  • Eugenio Gaiotti

    ()
    (Bank of Italy, Research Department)

  • Francesco Lippi

    (European Central Bank and Deutsche Bundesbank)

Abstract

We assemble a panel of 2,500 restaurants in Italy over the period 1998-2004 to study whether, and through which channels, the introduction of euro coins and banknotes had an impact on individual pricing behaviour. We reach three conclusions. Firstly, while the evidence rejects the hypothesis that the changeover led to a “doubling of prices” in this industry, the event may have focussed public attention on the cumulative price increases which took place before the changeover, reflecting costs and demand. Secondly, the rise in the average meal price was due more to a larger proportion of restaurants revising their prices than to large individual revisions. Lastly, more local market power (as proxied by a concentration index) was associated with a larger price increase; an interpretation of the latter finding is proposed which also explains why the effects of the cash changeover were stronger in less competitive industries.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: ftp://ftp.gde.unibocconi.it/gde_articles/2004/GDE_V63_N3-4_P491-526.pdf
Download Restriction: no

Bibliographic Info

Article provided by GDE (Giornale degli Economisti e Annali di Economia), Bocconi University in its journal Giornale degli Economisti e Annali di Economia.

Volume (Year): 63 (2004)
Issue (Month): 3-4 (December)
Pages: 491-526

as in new window
Handle: RePEc:gde:journl:gde_v63_n3-4_p491-526

Contact details of provider:
Postal: via Sarfatti, 25 - 20136 Milano (Italy)
Phone: 0039-02-58365306
Web page: http://www.gde.unibocconi.it/

Order Information:
Email:
Web: http://www.gde.unibocconi.it

Related research

Keywords: euro changeover; menu costs;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Mark Bils & Peter J. Klenow, 2004. "Some Evidence on the Importance of Sticky Prices," Journal of Political Economy, University of Chicago Press, vol. 112(5), pages 947-985, October.
  2. Michael Dotsey & Robert G. King & Alexander L. Wolman, 1999. "State-Dependent Pricing And The General Equilibrium Dynamics Of Money And Output," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 655-690, May.
  3. Fabrizio Adriani & Giancarlo Marini & Pasquale Scaramozzino, 2004. "The Inflationary Consequences Of A Currency Changeover: Evidence From The Michelin Red Guide," Royal Economic Society Annual Conference 2004 45, Royal Economic Society.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Columba, Francesco, 2008. "The speed of euro adoption," Journal of International Money and Finance, Elsevier, vol. 27(2), pages 249-259, March.
  2. Stix, Helmut, 2009. "Perceived inflation and the euro: Evidence from an Austrian survey," European Journal of Political Economy, Elsevier, vol. 25(4), pages 547-561, December.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:gde:journl:gde_v63_n3-4_p491-526. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Erika Somma).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.